Credit Card Processing for Merchants: NFC—What Is It and How Does It Work?

NFC is a term associated with payment processing and stands for Near Field Communication. It is basically "contactless" payment processor technology. NFC works by communicating via a microchip through an encrypted channel two to three centimeters away from an authorized device. To make a payment via NFC credit card reader, a credit card, phone or tablet that is equipped with an NFC chip is tapped on the reader. NFC payments are a safer way to process payments through credit card processing software than the traditional swipe method because the information on the NFC device is encrypted or locked; this ensures the credit card processing data stays secure as it goes from point A to point B. Point B can access the information from point A only by having the correct key to “unlock” the information.

Salt Lake City, Utah is ahead of the curve with NFC payment and has been chosen to be one of the beta cities to test out this new technology. Wherever you are in Salt Lake City—riding the local public trains, shopping or dining at local restaurants—you will see people tapping phones and credit cards instead of swiping. Utah Transit Authority has the largest amount of NFC users so far with 30% of riders using this technology. Some of the local Salt Lake City companies that accept NFC payments are Great Harvest Bread Company, Lola Bella, Maverik, Salt Lake Running Company, Sugar House Coffee, Supersonic Car Wash, and The Larry H. Miller Group. Aéropostale, The Coca-Cola Company, Champs Sports, Dillard’s, Foot Locker, Jamba Juice and Macy’s are accepting NFC payments on a national level.

As a business owner you know it’s great to stay up to date with current technology. Sometimes the technology can outpace the equipment and staff needed to support it. However, there are many credit card processing software and terminals that support the new NFC technology. VeriFone^® payment solutions has come out with many credit card terminals that support NFC. It’s important to contact your merchant service provider and ask them which NFC options they support. Not all merchant service providers have the ability to process NFC payments yet. ECI's Preferred Payment Processing Partner, NET1, can support NFC payments. Learn more about NET1 Payment Solutions.